Hello, I was asked to sign an IP Assignment agreement in August of 2012 pertaining to a software system that I have created. The other party is based In New York in the United States. The first clause of the agreement that I signed states "(a) The Company will pay to the employee a noncreditable, nonrefundable fee of $50.00 on execution of this Agreement.". To date no such fee has been paid to me so I want to know if the agreement is valid. I am based and work in the UK, and I am an "employee" of the New York company (it is a start-up) although I am not paid, and have not been paid, any salary. Is there a "term" whereby such an agreement containing such a clause becomes invalid after a certain period of time? In other words, could the other party now send me the fee, and would I then have signed over my IP to them?
I am trying to ascertain if the agreement is essentially null and void at this time as a result?
NB - I can cut and paste the entire agreement text to you if this would be helpful?
Here it is:
Confidentiality, Invention Assignment, and
Covenant Not To
Compete With IP Agreement
This agreement is entered into between XXXXX XXXXX (the “assignor ”), residing at 19 Honey Lane, Cholsey, Oxon, OX10 9NL, United Kingdom and Internet Ethics Corp., LLC including its subsidiaries, affiliates, successors or assigns, a limited liability company incorporated in Delaware (together the “Company”) with a principal place of business at 32 Union Square East, Suite 1100, New York, NY 10003 on (“Effective Date”).
As a condition of my business relationship with the Company, and as an employee or contractor with the Company, and my receipt of compensation now and hereafter paid to me by Company and the Company’s agreement to provide information pursuant to Section 2(a)(i), I agree to the following terms and conditions of this Confidentiality, Invention Assignment, and Covenant Not To Compete Agreement (the “Agreement”):
(a) The Company will pay to the employee a noncreditable, nonrefundable fee of $50.00 on execution of this Agreement.
(b). The parties acknowledge that the consideration to be received by the assignor is made by the Company in exchange for the rights granted here especially to Confidential Information and Inventions, and also to know-how, patents (if any, including patents covering improvements and copyrights), and technological data. The parties acknowledge that the provision of the inventions, know-how, technology, inventions, copyrights, trademarks, discoveries and improvements made by assignor during his business relationship by Company, and the Company and its affiliates and sublicensees, including third parties the Company has contracted with access to inventions, know-how and technological data thereby gained, is sufficient to create the obligations for consideration agreed to here.
2. Confidential Information.
(a) Company Information.
(i) The Company agrees that upon the commencement of my business relationship, it will make available to me Confidential Information of the Company that will enable me to perform my duties to the Company. In exchange, I agree to use such Confidential Information solely for the Company’s benefit. I understand that “Confidential Information” means any Company proprietary information, technical data, trade secrets or know-how, including, but not limited to, research, product plans, products, services, markets, software, developments, inventions, processes, formulas, technology, designs, drawings, engineering, hardware configuration information, marketing, finances or other business information disclosed to me by the Company either directly or indirectly in writing, orally or by drawings or observation of parts or equipment. I further understand that Confidential Information does not include any of the foregoing items that have become publicly known and made generally available through no wrongful act or omission of mine or of others who were under confidentiality obligations as to the item or items involved or improvements or new versions thereof.
(ii) I agree at all times during the term of my business relationship and thereafter, to hold in strictest confidence, and not to use, except for the exclusive benefit of the Company, or to disclose to any person, or company without written authorization of the board of directors of the Company, any Confidential Information of the Company.
(a) Assignor has no interest. I recognize that these responsibilities regarding technology, inventions, copyrights, trademarks, discoveries and improvements exist not only between me and the Company, but also for any work done during the period of my business relationship with Company and/or contract work for any third parties the Company contracts with. I hereby declare and confirm that by virtue of my business relationship at the Company I have no right, title, interest or benefit whatsoever, into, over, or upon the Intellectual Properties, including, but not limited to, any existing or future patents, copyrights and/or trademarks, belonging to any third parties the Company contracts or has contracted with, and in conjunction with my services as an employee, are or will be utilized. All Intellectual Properties developed or work performed within my scope of business relationship with the Company or a third party the Company contracts with, are the sole property of the Company or the contracted third party. I further declare and confirm that at no time hereafter, pursuant to the Effective Date, can I claim or purport to claim directly or indirectly in any manner whatsoever any right, title, interest into, over or upon the aforementioned Intellectual Properties of third parties contracted with by the Company. I further understand that the aforementioned Intellectual Properties are the sole property of third parties contracted with by the Company.
(b) Assignment of Inventions. I agree that I will promptly make full written disclosure to the Company, will hold in trust for the sole right and benefit of the Company, and hereby assign to the Company, or other such designees, all my right, title, and interest in and to any and all inventions, original works of authorship, developments, concepts, improvements, designs, discoveries, ideas, patents, trademarks or trade secrets, whether or not they may be patented or registered under copyright, trademark or similar laws, which I may solely or jointly conceive or develop or reduce to practice, or cause to be conceived or developed or reduced to practice, during my business relationship with the Company (collectively, the “Inventions”). I further acknowledge that all original works of authorship which are made by me (solely or jointly with others) within the scope of and during the period of my business relationship with the Company and which may be protected by copyrights are “works made for hire,” as that term is defined in the United States Copyright Act. I understand and agree that the decision whether or not to commercialize or market any Invention developed by me solely or jointly with others is within the Company’s sole discretion and for the Company’s sole benefit and that no royalty will be due to me as a result of the Company’s efforts to commercialize or market any such Invention.
(c) Maintenance of Records. I agree to keep and maintain adequate and current written records of all Inventions made by me (solely or jointly with others) during the term of my business relationship with the Company. The records will be in the form of notes, sketches, drawings, and any other format that may be specified by the Company. The records will be available to and remain the sole property of the Company at all times.
(d) Patent and Copyright Registrations. I agree to assist the Company, or its designee or other such designees, at the Company’s expense, in every proper way to secure the Company’s rights in the Inventions and any copyrights, patents, mask work rights or other intellectual property rights relating thereto in any and all countries, including, but not limited to, the disclosure to the Company of all pertinent information and data with respect thereto, the execution of all applications, specifications, oaths, assignments and all other instruments which the Company deems necessary in order to apply for and obtain such rights and in order to assign and convey to the Company, its successors, assigns, and nominees the sole and exclusive rights, title and interest in and to such Inventions, and any copyrights, patents, trademark, mask work rights or other intellectual property rights relating thereto. I further agree that my obligation to execute or cause to be executed, when it is in my power to do so, any such instrument or papers shall continue after the termination of this Agreement. If the Company is unable because of my mental or physical incapacity or for any other reason to secure my signature to apply for or to pursue any application for any United States or foreign patents or copyright registrations covering Inventions or original works of authorship assigned to the Company as above, then I hereby irrevocably designate and appoint the Company and its duly authorized officers and agents as my agent and attorney in fact, to act for and in my behalf and stead to execute and file any such applications and to do all other lawfully permitted acts to further the prosecution and issuance of letters patent or copyright registrations thereon with the same legal force and effect as if executed by me. I understand that by this agreement the Company agrees in the event that, subsequent to my business relationship with the Company, my assistance is needed in regards XXXXX XXXXX defending or enforcing any patent which I am an inventor or co-inventor, that the Company will pay reasonable compensation for my time at a rate to be agreed.
4. Return of Company Documents. I agree that, at the time of ceasing my business relationship with the Company, I will return to the Company (and will not keep in my possession, recreate or deliver to anyone else) any and all devices, records, data, notes, reports, proposals, lists, correspondence, specifications, drawings blueprints, sketches, materials, equipment, software codes, client lists, database information, and any other documents or property, or reproductions of any aforementioned items developed by me pursuant to my business relationship with the Company or otherwise belonging to the Company, its successors or assigns, including, but not limited to, those records maintained pursuant to paragraph 3(c). At the termination of my business relationship, I agree to sign and deliver the “Termination Certificate” attached as Exhibit A.
5. Covenant Not to Compete.
(a) I agree that during the course of my business relationship and for a period of eighteen (18) months immediately following the termination of my relationship with the Company for any reason, whether with or without good cause or for any or no cause, at the option either of the Company or myself, with or without notice, I will not, without the prior written consent of the Company, build, design, finance, acquire, lease, operate, manage, invest in, work or consult for or otherwise develop a software device similar in design to the analyzer which is the subject of this agreement.
(b) I acknowledge that I will derive significant value from the Company’s agreement in Section 2(a) (i) to provide me with that Confidential Information of the Company to enable me to perform my duties to the Company. I further acknowledge that my fulfillment of the obligations contained in this Agreement, including, but not limited to, my obligation neither to disclose nor to use the Company’s Confidential Information other than for the Company’s exclusive benefit and my obligation not to compete contained in subsection (a) above, is necessary to protect the Company’s Confidential Information and, consequently, to preserve the value and goodwill of the Company. I further acknowledge the time, geographic and scope limitations of my obligations under subsection (a) above are reasonable, especially in light of the Company’s desire to protect its Confidential Information, and that I will not be precluded from gainful employment if I am obligated not to compete with the Company during the period and within the Territory as described above.
6. Representations. I agree to execute any proper oath or verify any proper document required to carry out the terms of this Agreement.
7. Arbitration and Equitable Remedies.
(a) Arbitration. Except as provided in subsection (b) below, I agree that any dispute, claim or controversy relating to any interpretation, construction, performance or breach of this Agreement, shall be settled by arbitration to be held in , New York in accordance with the rules then in effect of the American Arbitration Association. The arbitrator may grant injunctions or other relief in such dispute or controversy. The decision of the arbitrator shall be final, conclusive and binding on the parties to the arbitration. Judgment may be entered on the arbitrator’s decision in any court having jurisdiction. The prevailing party shall be awarded reimbursement for all of the filing fees and administrative costs, as well as attorney’s fees.
(b) Equitable Remedies. I agree that it would be impossible or inadequate to measure and calculate the Company’s damages from any breach of the covenants set forth in Sections 2, 3, 5, 7 and 9 herein. Accordingly, I agree that if I breach any of such Sections, the Company will have available, in addition to any other right or remedy available, the right to obtain an injunction from a court of competent jurisdiction restraining such breach or threatened breach and to specific performance of any such provision of this Agreement. I further agree that no bond or other security shall be required in obtaining such equitable relief and I hereby consent to the issuance of such injunction and to the ordering of specific performance.
8. Notice. Any notice, request, report or payment required or permitted to be given or made under this Agreement by either party must be given by sending such notice by certified or registered mail, return receipt requested, to the address set forth below or such other address as such party will have specified by written notice given in conformity here. Any notice not so given will not be valid unless and until actually received, and any notice given in accordance with the provisions of this article will be effective when mailed.
To Employee: 19 Honey Lane, Cholsey, Oxon, OX10 9NL, United Kingdom
To the Company: Internet Ethics Corp, LLC, 32 Union Square E., Ste. 1100, NY, NY 10003
9. General Provisions.
(a) Governing Law; Consent to Personal Jurisdiction. The laws of the State of New York govern this agreement without regard for conflicts of laws principles. I hereby consent to the personal jurisdiction of the state and federal courts located in the state of New York for any legal proceeding filed against me by the Company concerning this agreement.
(b) Entire Agreement. This Agreement sets forth the entire agreement between the Company and me relating to the subject matter herein and supersedes all prior discussions between us. No modification of or amendment to this Agreement, nor any waiver of any rights under this Agreement, will be effective unless in writing and signed by both of the parties. Any subsequent change or changes in my duties, salary or compensation will not affect the validity or scope of this Agreement.
(c) Severability. If one or more of the provisions in this Agreement are deemed void by law, the remaining provisions will continue in full force and effect.
(d) Successors and Assigns. This Agreement will be binding upon my heirs, executors, administrators and other legal representatives and will be for the benefit of the Company, its successors, and its assigns.
(e) Construction. The language used in this Agreement will be deemed the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against either party.
(f) Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be enforceable, and all of which together shall constitute one agreement.
(g) Waiver. No waiver by either party of any breach of this Agreement, no matter how long continuing or how often repeated, will be deemed a waiver of any subsequent breach thereof, nor will any delay or omission on the part of either party to exercise any right, power, or privilege hereunder be deemed a waiver of such right, power or privilege.
(h) Article Headings. The article headings here are for purposes of convenient reference only and may not be used to construe or modify the terms written in the text of this Agreement.
(i) Force Majeure. Neither party may be deemed to be in default of any provision of this Agreement, or for any failure in performance, resulting from acts or events beyond the reasonable control of such party, such as acts of God, acts of civil or military authority, civil disturbance, war, strikes, fires, power failures, natural catastrophes or other 'force majeure' events
10. I acknowledge and agree to each of the following items:
(a) I am executing this Agreement voluntarily and without any duress or undue influence by the Company or anyone else; and
(b) I have carefully read this Agreement. I have asked any questions needed for me to understand the terms, consequences and binding effect of this Agreement and fully understand them; and
(c) I have had the opportunity to receive the advice of an attorney of my choice before signing this Agreement.
(d) I understand that this agreement is in effect as of the Effective Date and that the terms of this agreement shall remain in full force and effect during the continuation of my business relationship and after the termination of my business relationship with the Company for any reason.
ASSIGNOR: Christopher R G Jones
COMPANY: Internet Ethics Corp., LLC
Internet Ethics Corp., LLC
I certify that I do not have in my possession, nor have I failed to return, any devices, records, data, notes, reports, proposals, lists, correspondence, specifications, drawings, blueprints, sketches, materials, equipment, other documents or property, or reproductions of any aforementioned items belonging to , its subsidiaries, affiliates, successors or assigns (together, the “Company”).
I further certify that I have complied with all the terms of the Company’s Confidentiality, Invention Assignment, and Covenant Not To Compete With IP Agreement signed by me, including, but not limited to, the reporting of any Inventions and original works of authorship (as defined therein), conceived or made by me (solely or jointly with others) covered by that agreement.
I confirm my agreements contained in the Confidentiality, Invention Assignment, and Covenant Not To Compete With IP Agreement.
I want to know:
1) If it is valid in the UK
2) If it is, do the other points I detailed mean that it is no longer valid - i.e.: time limit, lack of $50 consideration etc as fully detailed in my original question.
Sorry, it is not me that has to pay $50 as your interpretation seems to suggest! It is the Company that has to pay me $50 as consideration! They have not done so as of today. If you could please re-read clause 1(a) carefully as I think this is clear.
Based on that, could you please re-answer?
Thanks for your follow-up. From your answers it appears that the agreement I signed is not something I should be concerned about as is not enforceable here in the UK, and even if it was it hasn't been fully completed because they have not paid me the $50 consideration.
I am considering signing a similar IP agreement with another UK party to grant them rights to the software I have developed and if I do so I understand that the New York company cannot contest that I have infringed the agreement I signed with them in the UK. I hope this is correct! Thanks for your help.